ACROSS THE BOARD, PUTTING MORE
PRESSURE ON CONSUMERS.
>> Sandra: THANKS, CLAUDIA.
HOW MUCH LONGKER AMERICANS PUT
UP WITH THIS?
FORMER WALMART CEO BILL SIMON IS
WITH US.
HOW LONG CAN THE CONSUMER HANG
ON HERE?
INFLATION IS OUTPACING WAGE
GROWTH.
IF ALL THE EXTRA MONEY YOU’RE
EARNING IS GOING TO YOUR GROCERY
BILL, IT DOESN’T DO ANYTHING
ANYBODY GOOD.
>> NO, YOU’RE RIGHT.
THE CONSUMER HAS BEEN REMARKABLY
RESILIENT THE LAST TWO YEARS OF
PANDEMIC AND SYSTEMS SHOCK AND
SHUT DOWN.
I THINK THEY’VE REACHED THE END.
THEY’RE LOOKING AT THE UTTER
SHOCK OF WALKING INTO AN
AMERICAN SUPERMARKET AND SEEING
EMPTY SHELVES AND PRICING THAT,
YOU KNOW, REALLY HURT NOT ONLY
THE POCKETBOOK BUT THE FAMILY
AND THE PSYCHE OF THE AMERICANS.
YOU KNOW, I THINK THEY’RE ABOUT
TO THE BREAKING POINT.
I ALSO DON’T BELIEVE THAT WE’VE
SEEN THE END OF IT.
PRICES ARE GOING UP, INPUT
PRICES HAVEN’T BEEN FULLY PRICED
IN YET.
SO I THINK WE’RE GOING TO SEE
THIS THROUGH THE YEAR.
>> Sandra: I WAS TALKING TO MY
GOOD FRIEND, LARRY KUDLOW THAT
SUGGESTED THAT THERE’S NO END IN
SIGHT BASED ON CURRENT POLICIES
AND LACK OF STRATEGY, IT APPEARS
PRICES -- LOOK AT THAT SPIKE TO
THE END OF THE CHART.
YEARS OF INFLATION.
JUST RECENTLY IN THE PAST YEAR
THAT SIGNIFICANT SPIKE.
IN REAL DOLLARS, THIS IS QUITE
REMARKABLE, BILL.
THE "WALL STREET JOURNAL"
DECIDED TO TALLY IT UP.
PEOPLE ARE FEELING IT.
THEY WANT TO KNOW EXACTLY HOW
MUCH THE AMERICAN FAMILY IS
GETTING HIT BY THIS.
THE "WALL STREET JOURNAL" SAID
THE AVERAGE U.S. HOUSEHOLD IS
SPENDING $276 THIS MONTH BECAUSE
OF THAT SPIKE IN INFLATION THAT
IS REAL PAIN FOR THE AVERAGE
AMERICAN FAMILY.
>> YOU’RE NOT KIDDING.
THAT REALLY HURTS.
YOU’LL SEE THAT WHEN THE RETAIL
SALES REPORTS COME OUT.
YOU’LL SEE THAT WHEN YOU START
FEELING ABOUT THIS, YOU KNOW,
THE CONFIDENCE AND THE THE RIGHT
ANSWER WRONG DIRECTION OF THE
ECONOMY.
THE RESILIENCE OF THE CONSUMER
WHEN THEY SEE AN END IN SIGHT IS
ALWAYS THERE.
RIGHT NOW WE’VE GOT THIS INNER
CONNECTED TANGLE OF PROBLEMS.
WE’RE NOT GOING TO SOLVE
INFLATION UNTIL WE SOLVE SUPPLY
CHAIN ISSUES AND WE WON’T SOLVE
SUPPLY CHAIN UNTIL WE SOLVE THE
LABOR ISSUE.
UNTANGLING THOSE AND KNOWING
WHERE TO START WITHOUT ANY REAL
POLICY DIRECTION OR GUIDANCE OR
LEADERSHIP ON A FEDERAL LEVEL IS
GOING TO BE VERY DIFFICULT.
>> Sandra: FINAL QUESTION TO YOU
ON THIS, BILL.
YOU HAVE OBSERVED A LOT OF
CONSUMER BEHAVIOR HAVING LED
WALMART.
WE DO SEE A CONSUMER THAT IS
RESILIENT.
WE HAVEN’T REALLY SEEN DEMAND
WANE JUST YET IN THE FACE OF
THESE HIGHER PRICES.
THERE’S A CHANGE IN BEHAVIOR
WHEN YOU SO I HIGH INFLATION.
PEOPLE GO TO GENERIC PRODUCTS.
THEY LOOK FOR CHEAPER PRODUCTS,
ALTERNATIVES.
SHED SOME LIGHT ON THAT ON HOW
THE BEHAVIOR OF THE AVERAGE
AMERICAN CONSUMER WILL CHANGE IN
THE FACE OF THIS INFLATION.
>> SURE.
YOU CAN SEE THE CONSUMER MAKE
CHANGES IN CHOICES TO KEEP THEIR
LIFESTYLE GOING AS LONG AS THEY
CAN.
THEY MAKE CHANGES IN PROTEIN,
BEEF TO CHICKEN AND THEY CHANGE
PACK SIZES.
THAT SHOP AT DIFFERENT
LOCATIONS, CHANGE-UP SOME
HABITS.
BUT WHERE WE ARE TODAY, THERE’S
VERY LITTLE RELIEF IN SOME OF
THOSE CHANGES BECAUSE THE
COMPONENT COSTS OF EVERYTHING
HAVE INCREASED.
WHEN FUEL RAISES AT THE RATE
THAT ITS RISEN, THE FUEL
COMPONENT OF EVERY PRODUCT THAT
WE CONSUME IS IMPACTED BY THAT.
SO I THINK THAT RESILIENCE --
THAT’S WHY IT’S GOING TO BE
CHALLENGED IN THE CURRENT
OPERATION HERE.
THERE’S REALLY NO RELIEF POINT.
BEEF ISN’T CHEAP.
THE INCREASE OF BEEF IS NOT
CHEAPER THAN THE INCREASE IN
CHICKEN.
WE HEARD THAT BACON AND COFFEE
ON THE RISE NOW.
THERE’S NO WHERE TO GO.
>> Martha: YOU WAKE UP AND CAN’T
ENJOY THAT START TO YOUR DAY
BECAUSE YOU’RE KNOW YOU’RE
PAYING MORE FOR IT.
IT’S A REAL THING AND IT’S NOT GOING AWAY ANY TIME SON.